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This share jumped more than 100% in a day

Thursday saw numerous mining companies, such as Galaxy Resources Ltd (ASX: GXY), Pilbara Minerals Ltd (ASX: PLS) and Orocobre Limited (ASX: ORE), endure sizable declines.

But one mining hopeful, Diatreme Resources Limited (ASX: DRX), certainly bucked the downward trend exhibited by numerous miners, gaining about 114 per cent on Thursday.

Diatreme Resources, a Brisbane-based mineral explorations company, holds a portfolio of properties across Australia that the company believes are rich in mineral sands, gold and copper.

The company has stated that it’s focussed on the “highly prospective” Cyclone Zircon Project in the Eucla Basin, near the border of Western Australia and South Australia, where it has detected heavy mineral sands including zircon, rutile, leucoxene and ilmenite.

The Diatreme Resources share price surged on Thursday as the prospective miner announced it had struck a deal with a Chinese company which it claims brings Diatreme a “major step closer” to mining mineral sands at the site.

As part of the agreement mining services company China ENFI Engineering Limited is to complete a feasibility study for Diatreme’s Cyclone Zircon Project.

Diatreme Resources directors William Wang and Yufeng Zhuang appear to have faith in the company’s prospects and have together purchased millions of Diatreme shares over the last couple of years.

William Wang has been increasing his stake in Diatreme more recently, purchasing 300,000 in three separate transactions in December.

While Diatreme shareholders enjoyed hefty gains on Thursday, the company’s share price, currently trading at around 3 cents, is still a long way off the 20 cents it was going for back in 2008.

And, although it is clear Diatreme has the potential to reward shareholders with spectacular gains in short periods, it remains a highly speculative share.

Diatreme Resources reported losses of $376,000 for the quarter ended 30 September 2017.

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Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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